How to Convert Your Salary Account to a Regular Savings Account
Salary accounts and savings accounts have distinctive features and purposes to fill. Savings accounts are the basic banking services that most people maintain, while salary accounts are specifically designed to serve the salaried individuals. For any reason, like leaving a job or starting a new business, if a salary account is no longer required, the best thing to do is convert it into a regular savings account. A salary account will be automatically turned into a savings account if the salary is not credited during a certain period. Basically, the conversion is bound to happen, whether you initiate it or not. In fact, there might be some benefits to converting the account yourself.
While understanding the need for converting a salary account into a savings account is important, the focus here is on how you do it. We will discuss both these matters in detail; join us!
Key Differences: Salary vs. Savings Account
After an employer ceases to credit your salary to the account, most banks automatically convert the salary account to a regular savings account. The shift could bring about minimum balance requirements, new transaction limits, and other changes in account benefits. Rather than sitting around waiting for the bank, it’s better to ask them to convert it proactively. This way, you get a clear idea of the new terms, don’t incur penalties, and can choose an appropriate type of savings account that suits your requirements.
Understanding how a savings account differs from a salary account helps in managing expectations post-conversion:
| Feature | Salary Account | Savings Account |
| Purpose | For salary deposits | For general savings and earning interest |
| Interest | May not offer interest | Earns interest on deposited funds |
| Minimum Balance | Usually not required | A minimum balance is often required |
| Transaction Charges | Often waived or discounted | May apply based on bank policies |
| Additional Benefits | Perks like loans and card offers | Basic services, fewer exclusive perks |
Steps to Convert Your Account
It is easy to switch your salary account to a normal savings account. Here’s what you need to do:
● Contact Your Bank
Reach out to your bank’s customer service, visit their online portal, or go to your home branch. Inform them about the change in your employment status and your request to convert the account.
● Select the Savings Account Type
Savings accounts are available in various types; some pay higher interest, some have online features, and some target particular communities, such as students or senior citizens. Pick one that aligns with your lifestyle and financial objectives.
● Update Account Information (If Required)
You can be asked to complete a request form or send a written application. If the bank asks for recent KYC (Know Your Customer) documents, have them ready.
Eligibility Criteria for a Savings Account
To open or convert into a normal savings account, you would normally need to fulfil the following criteria:
- Be an Indian resident
- Minimum age of 18 years
Note: Certain categories of savings accounts are also available for foreigners who reside in India, Hindu Undivided Families (HUF), and minors with guardianship.
Documents You May Need
For the conversion, banks may ask for updated KYC documentation. Submit self-attested copies along with originals for verification, if required.
- Identity Proof: Aadhaar Card, Passport, Voter ID, or Driving License
- Address Proof: Utility Bill, Bank Statement, Passport, or Aadhaar (not older than months)
- Signature Proof: PAN Card, Passport, or Driving License
- Photographs: Recent passport-size photographs
Things to Watch Out For
Once converted, look out for:
- Minimum Balance Requirements: Be sure about the amount that needs to be retained to avoid fees.
- Changes in Perks: Loan discounts and other benefits related to salary might no longer be applicable; check to see what features the converted account offers.
- Updated Charges: Get used to any fresh ATM, chequebook, or transaction fees.
Final Thoughts!
While you check out the different types of savings accounts and get familiar with the process of converting your account, remember to understand all the features and benefits beforehand. Take the opportunity to open a new savings account that provides you with the best features that your current financial situation requires.
